Government of the District of Columbia Office of the Chief Financial Officer Office of Tax and Revenue

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1 Government of the District of Columbia Office of the Chief Financial Officer Office of Tax and Revenue 2005 D-40 Individual Income Tax Forms and Instructions Secure - Accurate - Faster Refunds... Special Notice You can contribute to the DC Statehood Delegation Fund (minimum $1) by writing Statehood and the amount of your contribution at the bottom of page 2 on your D-40. A contribution will either decrease your refund or increase the amount owed. DISTRICT OF COLUMBIA ELECTRONIC TAXPAYER SERVICE CENTER File Electronically Today! JL Inspected Revised 02/06 PRESRT STD U.S. POSTAGE PAID PERMIT NO WASHINGTON, DC D-2210 Underpayment of Estimated Income Tax By Individuals is referenced (see page 6) You can make your estimated tax payments and extension of time to file payments with e-check. See Long-term care insurance premiums paid after 4/11/05 are deductible (up to $500). See page 9, calculation A, line I. Line 25 of D-40 should read Enter from fed Line 9...

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3 Contents Need assistance? 4 Who must file a DC tax return? 5 Which form should you file? 5 When are your taxes due? 5 How can you file your return? 6 Refund status inquiry 6 Payment options 6 How can you avoid penalties and interest? 6 Instructions for 2005 Form D-40 7 Calculation of tax for income over $100, Assembling your return 14 Forms and instructions 15 D-40, Individual Income Tax Return Schedule S, Supplemental Information and Dependents Schedule H Homeowner and Renter Property Tax Credit FR-127 Extension of Time to File Income Tax Return FR-329 Consumer Use Tax on Purchases and Rentals Low Income Credit Table 41 Property tax credit tables for Schedule H filers 42 Tax tables for income of $100,000 or less 49 DC College Savings Plan 59

4 Need assistance? File or pay online: Get tax for ms Download forms at Request forms by fax: TAX(4829) (option 3) Request forms by mail: Pick up forms: Office of T ax and Revenue Reeves Center Municipal Center 941 North Capitol St NE Lobby th St NW Lobby 300 Indiana Av NW Lobby 8:15 am 4:30 pm 7 am 7 pm 6:30 am 8 pm Recorder of Deeds Building Wilson Building MLK Jr Memorial Librar y 515 D St NW Lobby 1350 Pennsylvania Av NW 901 G St NW 8:30 am 4:30 pm 7 am 7 pm Sunday, 1-5 pm Monday Thursday 10 am 9 pm Penn Branch One Judiciar y Square Friday, Saturday 10 am 5:30 pm 3220 Pennsylvania Av SE th St NW Lobby 8:15 am 4:30 pm 7 am 7 pm Tuesdays & Thursdays Ask tax questions Contact our Customer Service Call Center: TAX(4829) Regular hours Extended hours 8:15 am 4:30 pm April :15 am 6 pm; April 18-8:15 am 8 pm Monday Friday Monday-Friday Ask tax questions; get free tax preparation help Visit our Walk-In Center, 941 North Capitol St NE 1 st floor Regular hours Extended hours Saturdays 8:15 am 4:30 pm April :15 am 6 pm April 8 & 15-9 am 1 pm Monday Friday Monday Friday Visit our Penn Branch Satellite Center, 3220 Pennsylvania Av SE Regular hours 8:15 am 4:30 pm Tuesdays & Thursdays Need help with this for m? Come to our Walk-In Center, at 941 North Capitol St NE. Are you unable to hear or speak? Call the DC Relay Service, [Korean/? North Capitol St NE. (Language Line). [Spanish/Español] Necesita ayuda para leer o entender inglés? Llame al o venga a 941 North Capitol St NE. Pida que le asignen un intérprete de la Línea de los Idiomas (Language Line) para que le ayude, sin costo alguno. [Vietnamese/Tieáng Vieät] Quyù vò coù caàn giuùp ñôõ ñeå ñoïc vaø hieåu Anh ngöõ khoâng? Xin goïi hoaëc ñeán 941 North Capitol St NE. Yeâu caàu coù ñöôïc thoâng dòch vieân Ñöôøng Daây Ngoân 2 Ngöõ (Language Line) ñeå giuùp ñôõ mieãn phí cho quyù vò. 4

5 Who must file a DC tax return? You must file a DC individual income tax return if -- You were a DC resident and were required to file a 2005 federal return. Your permanent residence was in DC for part or all of You lived in DC for 183 days or more during 2005, even if your permanent residence was outside DC. You were a member of the armed forces and DC was your home of record for part or all of You are the spouse of an exempt military person or another exempt person, such as a non-resident presidential appointee and you meet any one of the above requirements. Do not file a DC return if -- You were not required to file a federal return. You were not a resident of DC at any time during You were an elected member of the U.S. government who is not domiciled in DC. You were an employee on the personal staff of an elected member of the U.S. Congress and you and the elected member are bona fide residents of the same state. You were a member of the U.S. Executive Branch appointed by the President, subject to confirmation by the U.S. Senate, whose tenure of office is at the pleasure of the President and you were not domiciled in DC during any part of You were a justice of the U.S. Supreme Court and were not domiciled in DC during any part of Special filing circumstances Part-year status If you were a DC resident (or your permanent home was in DC) for less than a year, you must file D-40 and mark in the Filing Status area that you are a part-year resident. Amended return File an amended return any time you realize your DC tax liability for a prior open tax year (usually 3 years) has changed. To file an amended return for the current year, complete another 2005 D-40 with the corrected information and fill in the amended return oval. Attach an explanation of the changes. File the amended return separately from any other return. By filing an amended return as soon as possible, you will reduce the penalty and interest charges on any balance. If you are filing an amended return for a prior year, file a copy of the return filed for that year, fill in the amended return oval and attach a statement explaining the items amended. If the Internal Revenue Service adjusts your individual federal tax return, you must file an amended DC return within 90 days of receiving notice of the federal adjustment. Attach a copy of the adjusted federal return. Refund of DC taxes withheld If you were a DC resident but are not required to file a DC return, you must file a D-40 or D-40EZ to request a refund of any DC taxes withheld. If you were not a DC resident and are not required to file a DC return, but DC tax was withheld from your wages, file Form D-40B, Nonresident Request for Refund. Business income of more than $12,000 If you have gross income from DC sources of more than $12,000 from a business or business activity, including the rental of property, you must file Form D-30, Unincorporated Business Franchise Tax Return and report that income. The only exception is if you are specifically exempted by law. Calculation A (item f) on page 9 of this booklet allows you to subtract any income reported and taxed on forms D-20, D-30 or D-41 from the federal adjusted gross income to be entered on the D-40. Which form should you file? D-40EZ Income Tax Return for Single and Joint Filers with No Dependents You may use this simpler form if you meet all of the following: Your filing status is single or married filing jointly; You do not claim dependents; You do not claim an exemption for being age 65 or older or legally blind; You were a DC resident from January 1 through December 31, 2005; Your income is $100,000 or less and consists only of wages, salaries and tips; taxable scholarships or fellowship grants; unemployment compensation; and/or interest and dividends ($1500 maximum); You have no federal adjustments to income; You do not itemize your deductions; You do not file DC Schedule H; You do not file DC Schedule L; You do not make estimated income tax payments; and You do not claim a deduction for a DC college savings plan payment. D-40 Individual Tax Return Use this form if you cannot use the D-40EZ. D-41 Fiduciary Income Tax Return Use this form if you are the fiduciary of a DC estate or trust and: The gross income for the estate is $1,370 or more for the taxable year; or The gross income for the trust is $100 or more for the taxable year. When are your Taxes Due? File your return and pay any taxes due by April 18, If you need more time to file your return, submit a request for an extension, Form FR-127 Extension of Time to File Income Tax Return, by April 18, Any tax due must be paid in full with the request; there is no extension of time to pay. FR-127 Extension of Time to File Use this form if you cannot complete and file your return by the due date. You can receive a six-month extension of time to file. You must submit this form by April 18, Do not use the federal extension form to request an extension of time to file the DC return. 5

6 Filing an extension does not extend the due date for paying any tax you may owe. Before filing for an extension, estimate the tax you will owe and pay it with the FR-127 by April 18, Attach a copy of your FR-127 to the D-40 when you file. Penalty and interest are charged on any tax not paid on time. How can you file your return? By mail Send your completed original return to: Office of Tax and Revenue PO Box 7861 Washington, DC Do not include more than one return per envelope. By DC e-file E-File offers individual income taxpayers a full Federal/State Electronic Filing program. There are two ways in which taxpayers can file their federal and DC returns together electronically: 1) through a tax practitioner who is an authorized e-file provider; or 2) through a commercial online filing service, which allows taxpayers to transmit their DC and Federal returns electronically from their home PC for a fee. Visit our website at for more information. In addition, we offer a free and easy way to file your DC income tax return on the Internet directly with the Office of Tax and Revenue (OTR). The electronic Taxpayer Service Center (etsc) allows you to file your D-40 and D-40EZ 24 hours a day, 7 days a week. This Internet site provides a full calculation of DC tax and credits. This filing option is available to taxpayers who filed a D-40 or D-40EZ tax return in To file online, visit our website at for more information. If you use one of our e-file options to file your DC income tax return, you may also choose to have your refund deposited directly into your checking or savings account. Refund Status Inquiry To check the status of your refund refer to Payment options Credit card 24-hour service You may pay the amount you owe on your 2005 tax return using Visa, MasterCard, Discover, or American Express. You will be charged a fee equal to 2.5% of your tax payment, which is paid directly to the Official Payments Corporation, the credit card service provider. Payment is effective the day you charge it. To charge your taxes by phone Call using a touch-tone phone. The DC jurisdiction code is You will be given a confirmation number, please save it for your records. To charge your taxes online Log onto and select make a payment. The DC jurisdiction code is You will be given a confirmation number; keep it with your records. Check or money order Include a check or money order made payable to the DC Treasurer with your completed return. Write your social security number, daytime phone number, and 2005 D-40 on your payment. Make sure your check will clear You will be charged a $65 fee if your check is returned to us. How can you avoid penalties and interest? File your return on time There is a 5% per-month penalty for failure to file a return or pay any tax due on time. The penalty is calculated on the unpaid tax for each month or part of a month that the return is not filed or the tax is not paid. The maximum penalty is an additional amount due, equal to 25% of the tax due. You will be charged interest of 10% per year, compounded daily, on any tax not paid on time. Interest is calculated from the due date of the return to the date paid. Interest on any underpayment of tax will accrue even if you requested an extension to file your return. Estimate your taxes accurately and pay as you go You need to estimate the amount of taxes you will owe and pay your taxes periodically throughout the year. You may have your employer withhold taxes from your earnings, make estimated tax payments yourself, or both. If you expect to owe $100 or more in taxes after subtracting your withholdings and credits from your estimated total tax, you must make additional payments on your own. You can request D-40ES, Estimated Individual Income Tax Vouchers,by calling The D-40ES voucher booklet explains the estimated tax payment rules and due dates. You will be charged a 10% per year (compounded daily) penalty for a late payment or an underpayment of taxes. An underpayment occurs if your withheld taxes, credits and estimated tax payments do not equal at least 90% of the amount of tax you owe on your DC return for 2005 or 100% of the amount of tax owed on your 2004 DC return. This penalty will be automatically assessed by OTR s integrated tax system. For additional information, see Form D-2210 Underpayment of Estimated Income Tax by Individuals. You may want to complete this form and attach it to your D-40 to avoid being assessed an underpayment of estimated tax penalty. Do not understate your taxes There is a 20% penalty on any understated amount of taxes due if: The unpaid amount is more than 10% of the actual amount due; or The unpaid amount is $2,000 or more. Tax preparers must pay a penalty for understating taxes for any of the following: the refund or amount due is based on unrealistic information; or the preparer should have been aware of a relevant law or regulation; or relevant facts about the return are not adequately disclosed. Penalties range from $250 to $10,000. 6

7 Instructions for the 2005 D-40 Getting started To complete this form, you should have the following A copy of your completed 2005 federal return (Form 1040, 1040A, or 1040EZ) and any additional forms, schedules, or worksheets related to the return. A copy of your completed state return if you filed an income tax return with another state. Copies of all your 2005 W-2 and 1099 forms. A calculator. A pen with black ink. Before completing your D-40 you will need to do a series of calculations contained in these instructions and copy many of the line items and totals onto your D-40. You may also need to attach other federal and DC schedules, forms and worksheets to your Form D-40. Schedule S Supplemental information and dependents Schedule S provides space for reporting a foreign address, dependents, head of household, DC franchise and fiduciary tax information and itemized deduction summary amounts. It contains Calculation G for determining the number of exemptions that may be claimed, and Calculation J for determining the DC tax amount for married filing separately on the same return. If you itemized on your federal return, you must itemize on your DC return. Fill in the itemized deduction information on page 2 of Schedule S. If you complete any part of this schedule, please staple it to your return. Part-year residents You will be given guidance for completing your D-40 throughout these instructions. How to file a part-year return If your home or permanent residence in DC was for less than a year, prepare a worksheet showing the type and amount of income received: During the time you resided in DC; During the time you were a non-resident; and The total income reported on your federal income tax return. If you received a state income tax refund while a resident of DC, you must subtract the amount of the refund if you included it as income received and allocated to DC. If you claimed itemized deductions on your federal income tax return, you must also include on your worksheet any deductions that pertain to the time you were a DC resident. If the itemized deductions were subject to a limitation on the federal return, you must complete Calculation F on page 11. Your worksheet information will assist you in completing Calculations A, B, C, D, F (if applicable) and H. You should keep a copy of your worksheet along with a copy of your tax return and all calculations. Filling out the form To aid us in processing your return quickly and accurately, please follow these guidelines. Do not print outside the boxes. Use black ink. Print in CAPITAL letters. Leave a space between words and between words and numbers. Write 3s with a rounded top, not a flat top. Write 7s without a middle bar. Fill in ovals completely. Do not or x ovals. Do not enter cents. Round cents to the nearest dollar. ROBER TS 8 E L M 37 $.00 Amended return Fill in the amended return oval. File an amended return any time your DC tax liability for a prior open tax year has changed. To file an amended return for the current year, fill in the amended return oval, and complete the D-40 with the correct information. Attach a statement explaining the adjustments. Please file the amended return separately from any other return. By filing an amended return as soon as possible, you will minimize the amount of penalty and interest charged. If the Internal Revenue Service adjusts your individual income tax return, you must file an amended DC return within 90 days of receiving notice of the federal change. To amend a prior year return obtain a copy of the D-40 for that year. Be sure to fill in the amended return oval. Attach a statement explaining the changes. Please check our website for prior year forms or call to receive forms by mail. Filing for a deceased taxpayer Fill in the oval. If a taxpayer died in 2005 or in 2006 before filing a return, a return must be filed for that person. Complete a D-40 and provide the deceased s information, not your own. You do not need to adjust his or her income, exemptions, or deductions to reflect the date of death. Tax preparers, other than the surviving spouse, such as executors, attorneys, or other personal representatives, must attach letters of administration. If a refund is due, complete and attach Form FR-147, Statement of Person Claiming Refund Due a Deceased Taxpayer, and a copy of the death certificate. Do not use the federal form, it is not acceptable for DC tax purposes. Foreign address Use Schedule S. If your home address is in another country, provide this information on Schedule S. Do not abbreviate the country name. Follow the country s practice for entering the postal code. Attach Schedule S to your D Note: Your social security number is used for tax administration purposes only x

8 8 Claiming Dependents and deductions for being blind and/ or over 65 Use Schedule S. You can take an exemption for each of your dependents. If claiming exemptions, use Schedule S to list each dependent s name, social security number, and relationship to you. You may also claim a deduction for yourself or your spouse being over 65 or blind. Attach Schedule S to your D-40. Filing status More than one filing status may apply to you. Use the one that will give you the lowest tax. Generally, you will use the same filing status on your DC return as you used on your federal return. However, if you used married filing jointly on your federal return, it may be better for you to file your DC return using either married filing separately or married filing separately on same return. If both spouses have income, figure your tax both ways to see which filing status is better. A married couple can only file a DC joint return or a DC married filing separately return for 2005 if federal law allows that couple to file a joint return for 2005 and the couple actually filed or will file a joint federal return for Line 1 Single You were unmarried or legally separated as of December 31, 2005, or were widowed and did not remarry before January 1, Married filing jointly You were married and both spouses were DC residents as of December 31, 2005, or your spouse died in 2005 and you did not remarry in If legally separated, don t file jointly. Married filing separately You are married and both spouses had income. Include your spouse s name and social security number in the Personal information section. You will each report only your own income, exemptions, deductions and credits. You will each report one half of the income from any securities, bank accounts, real estate, etc., that are registered or titled in both names. You must file using this status if: You and your spouse were part-year residents of DC during different periods of You were a DC resident and your spouse was one of the following: A member of the armed forces and not considered a DC resident; A member of the U.S. Congress or an employee on the personal staff of a member of Congress who is considered a resident of the member s state of residency; An officer of the U.S. Executive Branch whose primary residence was not in DC, who is appointed by the President, confirmed by the U.S. Senate and serves at the pleasure of the President; or A justice of the U.S. Supreme Court whose primary residence was not in DC. Dependent claimed by someone else If you are claimed as a dependent on someone else s 2005 return you may not claim an exemption for yourself. Married filing separately on same return If you claim this status, you and your spouse must combine your separate amounts using Calculation J on Schedule S so that you will either receive one refund or make one tax payment. You may also claim a credit for child and dependent care expenses, which you are not allowed to claim if you file on separate returns. Using this filing status may reduce the amount of tax that you pay by allowing each spouse to take advantage of lower tax brackets. Before filling out Calculation J and Form D-40, you will need to figure the following amounts for you and your spouse: Each person s federal adjusted gross income; Each person s additions to federal income; Each person s subtractions from federal income; Each person s deductions; and Each person s exemptions. If you and your spouse were part-year residents of DC during different periods of 2005, you cannot file separately on the same return. You must file separate returns. Head of household You were unmarried or legally separated as of December 31, 2005, and paid over half the cost of keeping a home for a qualifying person, such as a child or parent. Certain married people who lived apart from their spouse for the last 6 months of 2005 may also be able to use this filing status. Use Schedule S to enter the name of the qualifying person whether that person is a dependent or non dependent. Line 2 Part-year resident If you resided in DC for only part of 2005, you must allocate your income, exemptions, deductions and credits. Before completing the D-40, calculate the following: Income received when you were a resident of DC and when you resided outside DC and Deductible expenses paid when you resided outside DC and when you resided in DC. The same allocation is required for exemptions, credits and other deductions. Number of months of DC residency Divide the number of days you lived in DC by 30 to figure the number of months of DC residency. Any remainder over 15 days counts as a full month. Enter the number of months you were a DC resident. Example 196 days of residency in DC divided by 30 = 7 months (6 months plus one month due to the remainder of 16 days). Income Information The amount of income on which you are taxed on your federal individual return is often different from the amount of income on which you are taxed by DC. Make adjustments to your federal income in Lines of D-40 by subtracting amounts exempt from DC tax and adding amounts exempt from federal tax. Note: You may be eligible for an annuity/pension exclusion. See Line h in Calculation A on the next page. You can copy many line amounts directly from federal forms 1040, 1040A, and 1040EZ. Please be careful since the line numbers for these amounts differ from D-40 line

9 numbers. Copy lines 3 through 11 from the appropriate lines on your federal return. Do not recalculate any amounts or totals. Some amounts entered on your federal return may not need to be entered on your DC return. Not all items will apply to you. Fill in only those that apply. If the amount is zero, leave the line blank. If you had a loss for Lines 6, 7, 8, 9, 10, 12, 14 or 16, fill in the oval by the Fill in if loss statement to show that the figure entered is negative. Do not enter a minus sign in the boxes. Do not enter cents. Round cents to the nearest dollar. Drop cents for amounts under 50 ; round up to the next dollar for amounts of 50 and over. Example: $10, rounds up to $10,501 $10, rounds down to $10,500 Line 3 Wages, salaries, tips, etc. Enter the amount from your 1040 or 1040A, Line 7 or 1040EZ, Line 1, plus any unemployment compensation received. Line 4 Taxable interest Enter the amount from your 1040 or 1040A, Line 8a (do not include 8b) or 1040EZ, Line 2. Line 5 Ordinary dividends Enter the amount from your 1040 or 1040A, Line 9a. Line 6 Business income or loss Enter the amount from your 1040, Line 12. Attach a copy of the 1040 Schedule C or C-EZ. If you had farm income or loss, enter the sum of Lines 12 and 18 from your Attach a copy of your 1040 Schedule F. If you had gross income, from DC sources, of more than $12,000 from a business or business activity you must file DC Form D-30, Unincorporated Business Franchise Tax Return. Line 7 Capital gain or loss Enter the amount from your 1040, Line 13. Attach a copy of your 1040 Schedule D. Line 8 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Enter the amount from your 1040, Line 17. Attach a copy of your 1040 Schedule E. If you had gross income, from DC sources, of more than $12,000 from such a business or business activity you must file a DC Form D-30, Unincorporated Business Franchise Tax Return. An S corpora- Calculation A Subtractions from federal adjusted gross income Some, all, or none of these line items may apply to you. Fill in only those that apply. a If part-year resident, income received while residing outside DC Enter this amount on D-40 Line 13b. Part-year residents: for Lines b through h include only the amounts that apply to the time you resided in DC. b Amount of taxable interest from US Treasury bonds and other obligations This interest is included in the amount from your 1040 or 1040A, Line 8a or 1040EZ, Line 2. It may be all or part of that amount, or it may be 0. See also your federal form 1099INT, Line 3. c Taxable refunds, credits, or offsets of state and local income taxes from 1040, Line 10 d Taxable amount of social security and tier 1 railroad retirement income from 1040, Line 20b or 1040A, Line 14b e Disability income exclusion from DC Form D-2440, Line 10 Attach a completed DC Form D On your federal return, a disability income exclusion is allowed as a refundable credit; however, DC treats it as a subtraction from income. If disability payments were included in your federal gross income, you may be able to claim an exclusion for them on your DC return. f Income reported and taxed on a DC franchise or fiduciary return If the income reported on your 1040 included any income reported and taxed on a D-20 or D-30 (DC Franchise Tax Returns) or a D-41 (Fiduciary Income Tax Return), enter it here. List the name of the entity, its federal employer identification number (or SSN) and its share of the income reported on Schedule S, D-40. g Interest and dividend income of a child from federal Form 8814* h DC and Federal Government pension and annuity income exclusion You must be 62 years or older as of December 31, 2005, to take this exclusion. Enter lesser of $3000 or the total taxable income you received from military retired pay, pension income, or annuity income from DC or federal government during the year. See your federal Form 1099R The maximum exclusion is $3000. i DC and federal government pension survivor benefits If you are an annuitant s survivor and are 62 years or older as of December 31, 2005, enter the total survivor benefits (do not include social security survivor benefits). j Awards, other than front and back pay, received due to unlawful employment discrimination. k Excess of DC allowable depreciation over federal allowable depreciation. This includes bonus depreciation on property depreciated over past years. l Long-term care insurance premiums paid after 4/11/05, total deduction limited to $500 m Total subtractions Add Lines a through l and enter the amount here and on D-40, Line 13. a b c d e f g h i j k l m *Note: Since any income reported on Form 8814 and included in the parent s federal return income is subtracted in item g, the child must file a separate DC return reporting this income. Attach a copy of your 8814 to the D-40. 9

10 tion must file Form D-20, Corporation Franchise Tax Return. Line 9 Pension and annuity, IRA distribution and other income Enter the amounts from your 1040, Lines 15b, 16b and 21. Certain other amounts, received under a claim of unlawful discrimination may, for DC tax purposes, be averaged over several tax years. Income averaging is allowed for back pay and front pay awarded as the result of a claim of an employment discrimination award. Back pay is compensation awarded and attributable to the period during which services were performed or would have been performed but for the claimed violation of law. Front pay is compensation awarded and attributable to employment that would have been realized in a subsequent year but for the claimed violation of law. Back pay and front pay are averaged and reported in income over the number of years in the period for which the back pay and/or front pay was awarded. This special treatment does not apply to punitive damages and interest. These are taxable in the year of receipt. If you need additional information, call our Customer Service Center ( ) or check our website ( Line 10 Federal total income Enter the amount from your 1040, Line 22; or 1040A, Line 15; or 1040EZ, Line 4. Line 11 Adjustments Enter the amount from your 1040, Line 36 or 1040A, Line 20. If you made adjustments to your federal total income, attach a copy of page 1 of your 1040 or 1040A. Calculation B Additions to federal adjusted gross income Some, all, or none of these line items may apply to you. Fill in those that apply. 10 a If part-year resident, enter the portion of adjustments (from Line 11 of D-40) that applies to the time you resided outside DC Part-year residents: for Lines b e include only the amounts that apply to the time you resided in DC. b Franchise tax deduction used to calculate business income or loss See 1040 Schedule C, Line 23. This deduction may be part of this amount or it may be 0. c Franchise tax deduction used to calculate income from rental real estate, royalties, partnerships, trusts See federal Forms 1065, Line 14 and 1041, Line 11. This deduction may be part of this amount or it may be 0. *d Deductions for an S corporation from federal Schedule K-1 of Form 1120S See Lines 8, 9, 10 and 11 of Schedule K-1. e Income distributions eligible for income averaging on your federal tax return From federal Form 4972, Lines 6 and 8 Add Lines 6 and 8 and enter here. f 30% or 50% federal bonus depreciation or additional IRC Section 179 expenses claimed for federal tax purposes g Any part of a discrimination award subject to income averaging h Total additions Add Lines a through g, enter here and on D-40, Line 15. *Also include on Line d any state or local tax deducted on Federal Form Calculation C Standard deduction for part-year DC residents a Your standard deduction Married filing separately enter $1,000. All others enter $2,000. b Number of months you lived in DC from D-40, Line 2 c Divide Line a by the number 12. d Part-year standard deduction Multiply Line c by Line b, enter here and on D-40, Line 18. Calculation D DC Itemized deductions for part-year DC residents with a limitation on federal itemized deductions a Total federal itemized deductions from Form 1040 Schedule A, Line 28 b Total federal itemized deductions before limitation from the worksheet in 1040 Schedule A instructions c Divide Line a by Line b. (Enter the percent.) d Portion of Line b amount that applies to the time you were a DC resident e Total limited itemized deductions for the time you were a DC resident Multiply Line d by Line c. f Portion of your state and local income tax or state and local general sales tax deduction from 1040 Schedule A, Line 5 that applies to the time you were a DC resident g State and local income tax or state and local general sales tax deduction addback Multiply Line f by Line c. h DC itemized deductions Subtract Line g from Line e, enter here and on D-40, Line 18. a b c d e f g h a b c d a b c d e f g h

11 Line 12 Federal adjusted gross income Enter the amount from your 1040, Line 37; 1040A, Line 21; or 1040EZ, Line 4. (If you took the 30% or 50% federal bonus depreciation or the additional IRC Section 179 expense, enter the total amount on Line f of Calculation B.) Line 13 Subtractions from federal adjusted gross income This is income that DC does not tax; subtract it from your federal adjusted gross income amount. To determine this amount complete Calculation A. Line 13a Amount you paid to DC College Savings Plan Enter the amount contributed to a qualified DC 529 College Savings Plan. You may deduct up to $3,000 annually for contributions you made to all qualified college savings accounts of which you are the owner. If you are married and file a joint or combined separate return, each spouse may deduct up to $3,000 for contributions made to all accounts for which that spouse is the sole owner. A rollover distribution is not a contribution for purposes of this deduction. Contributions made to one or more accounts in excess of the allowable $3,000 ($6,000 for joint filers) annual deduction may be carried forward as a deduction (subject to the annual limitation) for up to five years. If you were a part-year DC resident during the tax year, you may deduct only the amount contributed when you resided in DC. Line 13b Part-year resident For each type of income reported on your 1040, figure out the amount you received when you resided in DC and the amount received when you resided outside DC. Enter the total amount received when you resided outside DC. Also, enter it on Line a of Calculation A. Line 14 Add Lines 13 and 13a and subtract the total from Line 12. NOTE: In tax years after you have taken the federal bonus depreciation (30% or 50%), you must make adjustments. The DC basis for the depreciated property will be more than the federal basis for that same property. Use line k, Calculation A to subtract the excess depreciation from the federal AGI to show the proper DC allowable depreciation. Line 15 Additions to federal adjusted gross income This includes income not taxed by the federal government and Calculation E DC Itemized deductions for taxpayers with no limitation on federal itemized deductions a Total federal itemized deductions from 1040 Schedule A, Line 28 Part-year residents, enter the portion that applies to the time you were a DC resident. b State and local income tax or state and local general sales tax deduction from 1040 Schedule A, Line 5 Part-year residents, enter the portion that applies to when you were a DC resident. c DC itemized deductions Subtract Line b from Line a, enter here and on D-40, Line 18. a b c Calculation F DC Itemized deductions for full-year DC residents with a limitation on federal itemized deductions a Total federal itemized deductions from 1040 Schedule A, Line 28 b Total federal itemized deductions, before limitation, from the worksheet in 1040 Schedule A instructions c Divide Line a by Line b. (Enter the percent.) d State and local income tax or state and local general sales tax deduction from 1040 Schedule A, Line 5 e State and local income tax or state and local general sales tax deduction addback Multiply Line d by Line c. f DC itemized deductions Subtract Line e from Line a, enter here and on D-40, Line 18. a b c d e f Calculation H DC exemption amount for part-year DC residents a Number of exemptions from D-40, Line 19 b Exemption amount per month x ($1,370 divided by 12) c Multiply Line b by Line a. d Number of months you lived in DC from D-40, Line 2 e Exemption amount Multiply Line c by Line d. Round cents to the nearest dollar, enter here and on D-40, Line 20. Note: Calculation G Number of Exemptions and Calculation J Tax Computation for Married Filing Separately on Same Return, are on Schedule S Supplemental Information and Dependents. Calculation I DC tax on income more than $100,000 a Taxable income from Line 22 b Income subtractor 30,000 c Subtract Line b from Line a. d Tax rate for income x.09 more than $30,000 e Multiply Line c by Line d f DC tax on income of $30, ,000 g Tax Add Lines e and f. Round cents to the nearest dollar, enter here and on D-40, Line 23. Tax Rates 0-10,000 5% over 10,000-30, % over 30,000 9% 11

12 deductions not allowed by DC that you must add back to your federal adjusted gross income to figure your DC tax. Complete Calculation B. Line 16 DC adjusted gross income Add Lines 14 and 15. Re-enter this number on Line 16, page 2. Re-enter your last name and social security number at the top of page 2. DC taxable income Line 17 Deduction type Indicate which type of deduction (itemized or standard) you are taking by filling in the appropriate oval. You must take the same type of deduction on your DC return as you took on your federal return. If you itemized deductions, attach a copy of your 1040 Schedule A and DC Schedule S with the federal itemized deduction information filled in. Line 18 DC deduction amount Do not copy the amount from your federal return. DC has deduction amounts different from those allowed on your federal return. Standard deduction Married filing separately enter $1,000. All others enter $2,000. Part-year residents with standard deduction You must adjust your standard deduction to reflect the number of months you were a DC resident. Complete Calculation C. Itemized deductions You must adjust your federal itemized deductions amount before entering it on your DC return. Your DC income taxes and sales taxes are not deductible on your DC return. If your federal itemized deductions were not limited, complete Calculation E. If your deductions were limited and you were a full-year DC resident, complete Calculation F. If your deductions were limited and you were a part-year DC resident, complete Calculation D. NOTE: Do not deduct both state and local income tax paid and state and local general sales tax paid. Line 19 Total number of exemptions Whether you are filing single and claiming more than one exemption or married filing jointly and claiming more than two exemptions, complete Calculation G on Schedule S and attach the schedule to your D-40. Dependent claimed by someone else Do not claim any exemptions. Leave Lines 19 and 20 blank. Line 20 Exemption amount Multiply $1,370 by the Line 19 amount. If you claim no exemptions, leave Line 20 blank. Part-year residents You must reduce the full exemption amount to reflect the number of months you were a DC resident. Complete Calculation H. Line 21 Add Lines 18 and 20. Line 22 Taxable income Subtract line 21 from Line 16. If Line 21 is more than Line 16, make no entry leave blank. Calculation K Out-of-state income tax credit a Amount of income tax paid to other state(s), enter from the other state(s) return(s) b Income subject to income tax in other states and received while a resident of DC c DC adjusted gross income from D-40, Line 16 d Divide Line b by Line c. (Enter the percent.) e DC Tax from D-40, Line 23 f Maximum out-of-state credit Multiply Line e by Line d. g Enter the lesser of Line a or Line f. Also enter on D-40, Line 24. a b c d e f g Complete Calculation L to determine if you should take the DC Low Income Credit or the DC Earned Income Tax Credit. DO NOT TAKE BOTH*. Calculation L Income credit comparison of tax benefit You must attach a copy of your 1040, 1040A, or 1040EZ to your D-40. a Tax from D-40, Line 23 b Add credits from D-40 Lines c Subtract Line b from Line a and enter the result. d Your DC low income credit from the chart on page 41 e Enter the lesser of Line c or Line d f Federal earned income credit from 1040, Line 66a; 1040A, Line 41a; or 1040EZ, Line 8. g DC Earned Income Tax Credit rate g x.35 h DC Earned Income Tax Credit Multiply Line f by Line g. h Compare Line e to Line h: If Line e is greater than or equal to Line h, take the DC Low Income Credit. Enter the amount shown on Line d on D-40, Line 27. If Line e is less than line h, take the DC Earned Income Tax Credit. Enter the amount shown on Line h on D-40, Line 31. *Part year residents may not take the full amount of either credit. See page 8 of the instructions to determine the reduced amount. a b c d e f 12

13 DC tax, credits and payments The credits you claim on Lines are non-refundable, which means they can reduce the taxes you owe, but they will not result in a tax refund. The credits you claim on Lines 30 and 31 are refundable credits, which means if these credits plus any tax payments are greater than your total tax due, you may receive a refund. Line 23 Tax If Line 22 is $100,000 or less, use the tax tables on pages If Line 22 is more than $100,000, enter the tax amount from Calculation I. Married filing separately on same return Complete Calculation J on Schedule S. Before completing this calculation you must determine each person s separate federal adjusted gross income, additions to income, subtractions from income, deductions and exemptions. You must combine any separate amounts before making any entries on Lines of the D-40. Line 24 Out-of-state tax credit DC taxpayers may claim credit for income tax paid to a state if the income taxed by that state is derived from that state and is of a kind taxed by DC. The tax paid to a state is the total state tax liability shown on the state tax return. (It is not the withholding amount shown on your W-2.) Complete Calculation K to determine your credit. Attach a copy of the state income tax return(s) showing the payment for which you are claiming a credit. No DC credit is allowed for any other tax imposed by a state, including the following: Corporation franchise tax; License tax; Excise tax; Unincorporated business franchise tax; and Occupation tax. Line 25 Credit for child and dependent care expenses You cannot claim this credit if your filing status is married filing separately. If your filing status is married filing separately on the same return, you may divide the credit between spouses any way you wish. To figure your credit for DC tax purposes, multiply by.32, the amount from federal Form 2441, Line 9 or from federal Form 1040A, Schedule 2. Enter the result on Line 25 of the D-40. Attach a copy of the federal form you used. If you were eligible for the Child and Dependent Care Credit but it was not used for federal tax purposes, complete the appropriate one of the federal forms mentioned and claim the DC credit. Part-year residents Complete DC Form D-2441 and enter the amount from Line 6. Attach both DC Form D-2441 and a copy of the federal Form Line 26 DC police first-time homebuyer credit DC police officers who are first-time homebuyers in DC are eligible for a $2,000 per year income tax credit for the first five years. Officers must be listed in the MPD Housing Assistance Program, employed by the MPD and living in the qualified property. Enter $2,000 on Line 26. Line 27 DC Low Income Credit To qualify for this credit, your federal tax liability before credits and payments (1040, Line 44; 1040A, Line 28; or 1040EZ, Line 10) must be 0. If you claimed the federal Earned Income Credit, it may better for you to take the DC Earned Income Tax Credit instead of the DC Low Income Credit. Do not take both of these DC credits. Complete Calculation L to determine whether the DC Low Income Credit or the DC Earned Income Tax Credit is better for you. To determine the amount of low income credit you are eligible for, see the Low Income Credit Table on page 41. You must attach a copy of your form 1040, 1040A, or 1040EZ to your D-40 if you are claiming either of these credits. If you were a part-year resident of DC whichever credit is taken must be apportioned. For guidance on apportionment see the Line 2 instructions on page 8. Dependents claimed by someone else Use the calculation at the bottom of page 41 to determine the low income credit available. Line 28 Total non-refundable credits Add Lines Line 29 Total tax Subtract Line 28 from Line 23. If Line 23 is less than Line 28, make no entry leave it blank. Line 30 Property tax credit If you filed DC Schedule H, Homeowner and Renter Property Tax Credit, enter the amount from the appropriate Line (3 or 9). See the instructions in this booklet for assistance in completing Schedule H. Attach Schedule H to your D-40. Line 31 DC Earned Income Tax Credit Taxpayers who claimed the federal Earned Income Credit (EIC) can also claim a DC Earned Income Tax Credit of 35% of the federal credit. Taxpayers who claimed the DC Low Income Credit on D-40, Line 27 cannot claim the DC Earned Income Tax Credit; you may take only one of these DC credits. If the IRS is calculating your federal Earned Income Credit, wait until they notify you of that amount before you determine the amount of your DC Earned Income Tax Credit. Attach a copy of your federal return. If you were a part-year resident of DC this credit must be apportioned. For guidance on apportionment see the Line 2 instructions on page 8. Complete Calculation L to determine if the DC Low Income Credit or the DC Earned Income Tax Credit is better for you. Your federal EIC Enter the amount claimed on your 1040, Line 66a; 1040A, Line 41a; or 1040EZ, Line 8 and complete Calculation L. Line 32 DC income tax withheld Add the amount of DC income tax withheld as shown on your 2005 Forms W-2 and Attach copies of all W-2s and 1099s that show DC tax amounts withheld. Part-year residents Do not include income tax withheld for other states in the DC withholding amount. Line 33 Estimated income tax payments Enter the total amount of your 2005 DC estimated income tax payments. If you are filing separately, you and your spouse must divide the payments according to which spouse paid them. You cannot arbitrarily reallocate them between you. Line 34 Payments made with an extension of time to file If you filed Form-127, Extension of Time to File Income Tax Return, enter the amount you paid with the FR

14 14 Line 35 Total payments and refundable credits Add Lines If Line 35 is more than Line 29, go to Line 36. If Line 35 is less than Line 29, go to Line 41. You will then complete the appropriate section Your refund section or the Amount you owe section. Your refund Line 36 Amount you overpaid Subtract Line 29 from Line 35. Line 37 Amount you want to apply to your 2006 estimated tax Enter the amount of overpayment, if any, you want credited to your 2006 estimated tax. This amount will not be refunded. Line 38 Contribution to the public trust for drug prevention and children at risk. If you itemize your deductions, any amount you contribute is deductible on your 2006 federal and DC tax returns. The minimum contribution is $1. The amount contributed will reduce your refund. Line 39 Add Lines 37 and 38. Line 40 Refund amount Subtract Line 39 from Line 36. Amount you owe Line 41 Tax due Subtract line 35 from line 29. Line 42 Contribution to the public trust for drug prevention and children at risk If you itemize your deductions, any amount you contribute is deductible on your 2006 federal and DC tax return. The minimum contribution is $1. The amount contributed will increase the amount owed. Line 43 Total amount due Add Lines 41 and 42. You must pay this amount in full with your return. See page 6 for payment options. To contribute to the public trust fund if you are not due a refund or do not owe additional tax, please enter the contribution amount on Line 42. Payment should be made to the DC Treasurer and included with your return. Third party designee If you want to authorize someone to discuss DC tax matters with us on your behalf, enter that person s name and phone number in the space provided. Signature Sign and date your return. If your filing status is married filing jointly or married filing separately on the same return, both spouses must sign. If the return was prepared by a paid tax preparer, the tax preparer must also sign the return and provide his or her identification number and phone number. If the return is not signed, it will be sent back to you. Send in your original return, keep a copy for your records. LATE CHANGE You can contribute to the DC Statehood Delegation Fund (minimum $1) by writing Statehood and the amount of your contribution at the bottom of page 2 on your D-40. A contribution will either decrease your refund or increase the amount owed. Assembling your return Staple any check or money order, or Forms W-2 or 1099, to the front of your Form D-40 where indicated. Staple any requested documents to your Form D-40 in order using the file order number shown in the lower right corner of the schedule or form. Staple all supporting forms (including federal forms) here Staple check, money order, Forms W-2 and 1099 to Form D-40 only Send in your original DC return, not a copy. Please fold your return once and use the envelope enclosed. Staple any forms and documents (including any filed with your federal return), to the upper left corner in the following order: DC Form D-40 (with Forms W-2 and 1099 and check or money order attached as indicated) DC Schedule S DC Schedule H Federal Schedule A (Form 1040) DC Form FR-127 DC Form FR-147, letters of administration and a copy of the death certificate DC Form D-2210 DC Form D-2440 DC Form D-2441 Federal Form 1040, 1040A or 1040EZ Federal Schedule C (Form 1040) Federal Schedule C-EZ (Form 1040) Federal Schedule D (Form 1040) Federal Form 4797 Federal Form 4972 Federal Schedule E (Form 1040) Federal Schedule F (Form 1040) Federal Form 2441 Federal Form 8814 Federal Forms 1120S K-1/1065 K-1 Any state returns Personal records D-40 Payment W2, 1099 Maintaining organized and complete records supporting income and deduction items claimed on your return makes it easier to prepare the return, respond to any questions about it and provide additional information if you are ever assessed more tax. Helpful publications on recordkeeping available from IRS are: Publication 463 (PDF), Travel, Entertainment, Gift and Car Expenses; Publication 552 (PDF), Recordkeeping for Individuals; and Publication 583 (PDF), Starting a Business and Keeping Records

15 STAPLE OTHER REQUESTED DOCUMENTS IN UPPER LEFT Government of the 2005 D-40 Individual District of Columbia Income Tax Return Print in CAPITAL letters using black ink. Leave lines blank that do not apply to you. * * Personal information Fill in if: Amended return See instructions, page 7. OFFICIAL USE ONLY Fill in if: Filing for a deceased taxpayer See instructions, page 7. Your social security number Spouse s social security number Your daytime phone number Your first name M.I. Last name Spouse s first name M.I. Last name Home address (number and street) If foreign address use Sched S. Fill in if this is your first return or if your address is different from your last return. Apartment number City State Zip Code STAPLE W-2s AND ANY OTHER WITHHOLDING STATEMENTS HERE STAPLE CHECK OR MONEY ORDER HERE Filing status 1 Fill in only one: Single Married filing jointly Married filing separately Dependent claimed by someone else Married filing separately on same return Enter combined amounts for Lines See instructions, page 8. Head of household Enter the name of qualifying dependent or non-dependent on Schedule S. 2 Fill in if you are: A part-year resident Enter number of months of DC residency See instructions, page 8. Income Information Copy the amounts for Lines 3-11 below from your federal return. Some income lines on your federal return may not need to be copied. 3 Wages, salaries, tips, unemployment compensation, etc. 4 Taxable interest 5 Ordinary dividends Complete y our federal retur n first -- Enter y our dependents infor mation on DC Schedule S 6 Business income or loss Attach a copy of federal Schedules C or C-EZ. Fill in if loss: If you had farm income, see instructions, page 9. Attach a copy of federal Schedule F. Federal employer ID 7 Capital gain or loss Attach a copy of federal Schedule D. Fill in if loss: 8 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Fill in if loss: Attach a copy of federal Schedule E. 9 Pension and annuity, IRA distribution and other income Fill in if loss: 10 Federal total income from 1040, Line 22. Fill in if loss: 11 Adjustments from 1040, Line 36 or 1040A, Line 20 Attach a copy of page 1 of 1040 or 1040A. Computation of DC Adjusted Gross Income 12 Federal adjusted gross income 1040, Line 37; 1040A, Line 21; 1040EZ, Line 4. Fill in if loss: 13 Subtractions from federal adjusted gross income from Line m, Calculation A, page 9. 13a Amount you paid (or carried over) to DC college savings plan in 2005 Part-year residents see instructions, page 8. 13b Part-year residents (information only) 13b$.00 From Line a, Calculation A, page Add Lines 13 and 13a, subtract the total from Line 12, enter result. Fill in if loss: 15 Additions to federal adjusted gross income from Line h, Calculation B, page DC adjusted gross income Add Lines 14 and 15. Fill in if loss: Round cents to the nearest dollar. If amount is zero, leave the line blank. 3 $.00 4 $.00 5 $.00 6 $.00 7 $.00 8 $.00 9 $ $ $ $ $.00 Maximum $ a$ (for joint filers) $ $ $.00 Revised 08/ D-40 P1 Individual Income Tax Return page 1 File order 1 15

16 D-40 PAGE 2 Enter your last name. Enter your SSN. 16 DC adjusted gross income Enter adjusted gross income from Line 16 on the previous page. Fill in if loss: * * 16 $ Deduction type Take the same type of deduction as you took on your Fill in which type: Standard See instructions, page 12 for amount to enter on Line 18. Itemized See instructions, pages 11, 12 for amount to enter on Line 18. Attach copy of federal 1040 Schedule A; attach DC Sched S 18 DC deduction amount Do not copy from federal return. For amount to enter, see pages 11 and Number of exemptions If more than 1 (more than 2 if filing jointly), attach Calculation G, Schedule S. Also, if you or your spouse are over 65 or blind, complete and attach Calculation G of Schedule S 20 Exemption amount Multiply $1,370 by Line 19. Part-year DC residents use Calculation H, page Add lines 18 and Taxable income Subtract Line 21 from Line 16. If Line 21 is more than Line 16, leave blank. Fill in if loss: 18 $ $ $ $.00 DC tax, credits and payments 23 Tax If Line 22 is $100,000 or less, use tax tables on pages If more, use Calculation I, page 11. Fill in if married filing separately on same return Complete Calculation J of Schedule S. 24 Out-of-state tax credit From Calculation K, page 12. Attach copy of state return. State 25 Credit for child and dependent care expenses Enter from fed. 2441, line 9 or 1040A, Sch. 2 x.32 Attach a copy of your federal Form 2441 or 1040A, Sched. 2; if you are a part-year DC resident, attach DC Form D DC police first-time homebuyer credit 27 DC Low Income Credit Complete Calculation L, page 12. Attach a copy of your 1040, 1040A or 1040EZ 28 Total non-refundable credits Add Lines Total tax Subtract Line 28 from Line 23. If Line 23 is less than Line 28, leave blank. 30 Property tax credit Attach DC Schedule H. 31 DC Earned Income Tax Credit Enter your federal EIC $.00 x.35 = Complete Calculation L, page 12. Attach a copy of your federal return. 36 $ $ $ $ $ Tax due Subtract Line 35 from Line Contribution to the Public Trust for Drug Prevention and Children at Risk 43 Total amount due Add Lines 41 and $ $ $ $ $ $ $ $ $ $ $ $ DC income tax withheld from Forms W-2 and Attach correct copies estimated income tax payments 34 Payment made with an extension of time to file (or with original return if this is an amended return) 35 Total payments and refundable credits Add Lines Your refund Complete only if Line 35 is more than Line 29. Amount you owe Complete only if Line 35 is less than Line Amount you overpaid Subtract Line 29 from Line Amount you want applied to your 2006 estimated tax 38 Contribution to the Public Trust for Drug Prevention and Children at Risk 35 $ $ $ $ Add Lines 37 and 38. Payment options Attach check or money order payable to: DC Treasurer 40 Refund amount To pay by credit card, call or visit Subtract Line 39 from Line and enter DC jurisdiction code Third party designee If you want to allow another person to discuss this return with the Office of Tax and Revenue, enter the name and phone number of that person. Under penalties of law, I declare that I have examined this return and to the best of my knowledge it is correct. Declaration of paid preparer is based on all the information available to the preparer. Your signature Date Occupation Paid preparer s phone number Paid preparer s Federal ID, SSN or PTIN Spouse s signature if filing jointly or separately on same return Date Occupation Paid preparer s signature and date Send your signed original return to: Office of Tax and Revenue, PO Box 7861, Washington, DC D-40 P2 Individual Income Tax Return page 2 File order 2 Revised 02/06

17 Government of the District of Columbia 2005 SCHEDULE S Supplemental Information and Dependents Unless directed otherwise If you fill in any part of this schedule, staple it to your D-40. Print in CAPITAL letters using black ink. * * Enter your last name. Enter your social security number. Foreign address Do not abbreviate country name. Home address (number and street) Apartment number City State/Province Daytime phone number Country Postal code Dependents If you have more than 4 dependents, attach a statement to this schedule listing the name, relationship to you and social security number of each. First name M.I. Last Name Social security number Relationship First name M.I. Last Name Social security number Relationship First name M.I. Last Name Social security number Relationship First name M.I. Last Name Social security number Relationship Head of household filers SSN of qualifying non-dependent person First name of qualifying non-dependent person M.I. Last Name Income from DC franchise or fiduciary tax return Name of entity Federal employer ID number or SSN Your share of income Name of entity Federal employer ID number or SSN Your share of income $.00 $.00 Revised 08/ SCHEDULE S P1 Supplemental Information and Dependents page 1 File order 3

18 SCHEDULE S PAGE 2 Last name and SSN * * Calculation G Number of exemptions Do not attach this schedule to your D-40 if you only filled in Lines a, f and i of this Calculation and have not filled in any other section of Schedule S. a Enter 1 for yourself and a b Enter 1 if you are filing as a head of household and b c Enter 1 if you are age 65 or over and c d Enter 1 if you are blind d e Enter number of dependents e f Enter 1 for your spouse if married filing jointly or married filing separately on same return f g Enter 1 if you are married filing jointly or married filing separately on same return, and your spouse is age 65 or over g h Enter 1 if you are married filing jointly or married filing separately on same return, and your spouse is blind h i Total number of exemptions Add Lines a h, enter here and on D-40, Line 19. i Calculation J Tax computation for married filing separately on same return Enter separate amounts in each column. Do not combine amounts until you reach Line k. You Your spouse a Federal adjusted gross income a If you and your spouse filed separate federal returns, enter amounts from 1040, Line 37 or 1040A, Line 21. If you and your spouse filed a joint federal return, enter each person s portion of federal adjusted gross income. b Total additions to federal adjusted gross income b Enter each person s portion of additions entered on D-40, Line 15. c Add Lines a and b. c d Total subtractions from federal adjusted gross income d Enter each person s portion of subtractions entered on D-40, Lines 13 and 13a. e DC adjusted gross income Subtract Line d from Line c. e f Deduction amount f Enter each person s portion of deductions entered on D-40, Line 18. (You may allocate this amount any way you like.) g Exemption amount g Enter each person s portion of the exemption amount entered on D-40, Line 20. h Add Lines f and g. h i Taxable income Subtract Line h from Line e. i j Tax. If Line i is $100,000 or less, use tax tables on pages j If more than $100,000, use Calculation I, page 11. k Add the amounts on Line j, enter here and on D-40, Line 23. k Total tax Additional Information from Federal Form 1040 Schedule A (attach a copy) a Medical and Dental Expenses from Schedule A, Line 4 b Taxes Paid from Schedule A, Line 9 c Interest Paid from Schedule A, Line 14 c d Gifts to Charity from Schedule A, Line 18 e Casualty and Theft Losses from Schedule A, Line 19 e f Job Expenses and Most Other Miscellaneous Deductions from Schedule A, Line 26 f g Other Miscellaneous Deductions from Schedule A, Line 27 g a b d $.00 $.00 $.00 $.00 $.00 $.00 $.00 Revised 08/ SCHEDULE S P2 Supplemental Information and Dependents page 2 File order 4

19 Instructions for Schedule H Who can claim a property tax credit? (Eligibility requirements) Renters and homeowners who have a total household gross income of $20,000 or less may be eligible to claim a property tax credit. If you are filing a Form D-40 and claiming this credit, you must file Schedule H with it. If you are not required to file a Form D- 40, you may file a Schedule H by itself. You must meet all of the following requirements to claim this credit: You were a DC resident from January 1 through December 31, 2005; You rented or owned and lived in your home in DC during all of 2005; Your total household gross income for 2005 was $20,000 or less; You did not rent from a landlord whose property was either exempt from real property taxes or who paid a percentage of rental income to DC instead of paying a real estate tax; If you are under age 65, you are not claimed as a dependent on someone else s 2005 federal, state, or DC income tax return; Your residence is not part of a public housing dwelling; and If you are not blind or disabled, you and your spouse (if married) must provide at least 50% of the total household gross income. Only one member of a household can claim a property tax credit. A property tax credit may not be claimed on behalf of a taxpayer who died before the end of the tax year. When is Schedule H due? If you are filing a Form D-40, your Schedule H must be attached to it and submitted by April 18, If you have received an extension of time to file your D-40, you may file Schedule H by the extended due date. If you are filing Schedule H by itself, you must file it by April 18, There is no extension of time to file a Schedule H. Personal information Section A or Section B. If you rent your home, use Section A; if you own your home, use Section B. Blind or disabled If you identify yourself as blind or disabled, your physician must complete the certification on page 3 of Schedule H. You must submit it with Schedule H. Section A Claim based on rent Line 1 Total household gross income You must report the income of every member of your household including any income not subject to DC income tax. Use the calculation on page 2 of Schedule H to determine the total amount of household gross income. If your total household gross income is more than $20,000, do not claim the property tax credit. Household members are the people you live with whether or not they are related to you. For example, if you live in an apartment where you share the kitchen and bathroom with two other people, they are household members, even if they are not related to you. If you are a tenant in a house or apartment where other people live, but you have a separate kitchen and/or bath, you are the sole household member. On page 2 of Schedule H, list the names and social security numbers of all household members whose income is included in the total household gross income amount. Line 2 Rent paid in 2005 Enter the total amount of rent you paid during the year on Line 2 and multiply it by.15. If Line 2 exceeds Line 1, you cannot claim a property tax credit unless you provide adequate documentation to support the claim. If you sublet part of your residence to another person, you must subtract the rent you receive from that person from the rent you pay. The income you receive from subletting is taxable and must be reported on your D-40. Line 3 Property tax credit Using the amounts entered on Lines 1 and 2, find your property tax credit amount in the tables on pages If you are under the age of 62 and are not blind or disabled, use Table A; if you are 62 or older or blind or disabled, use Table B. Line 4 Rent supplements received in 2005 by you or your landlord on your behalf Enter any federal or state subsidies you received, or any received on your behalf, during the year. If there were none, leave the line blank. Section B Claim based on real property tax Line 7 Total household gross income You must report the income of every member of your household including any income not subject to DC income tax. Use the calculation on page 2 of Schedule H to determine this income. To help you complete this calculation, refer to your 2005 federal return (Form 1040, 1040A or 1040EZ). If your total household gross income is more than $20,000, do not claim the property tax credit. Household members are all the people you live with whether or not they are related to you. For example, if you live in a house where you share the kitchen and bathroom with two other people, they are household members, even if they are not related to you. If you rent out part of your house and share the kitchen and bath with a tenant, you must report the tenant s income as part of your total household gross income. Line 8 Real property tax paid in 2005 Enter the amount of DC real property tax you paid (refer to your real property tax bills). In determining your property tax credit, you may include any deferred portion of your real property tax as part of the real property tax paid. Line 9 Property tax credit Using the amounts entered on Lines 7 and 8, find your property tax credit amount in the tables on pages If you are under the age of 62 and are not blind or disabled, use Table A. If you are 62 or older or blind or disabled, use Table B. 23

20 Government of the District of Columbia Important: Read the eligibility requirements. Print in CAPITAL letters using black ink SCHEDULE H Homeowner and Renter Property Tax Credit OFFICIAL USE ONLY * * Personal information Fill in if you are: 62 or older Blind or disabled Your first name M.I. Last name Your social security number Spouse s social security number Your daytime phone number Mailing address (number and street) Fill in if this is your first return or if your address is different from your last return. Apartment number City State Zip Code Address of property (number and street) for which you are claiming credit if different from above Apartment number City State Zip Code Type of property for which you are claiming credit. Fill in only one: House Apartment Rooming house Complete either Section A or Section B, whichever one applies. Section A Credit claim based on rent paid Round cents to the nearest dollar. If amount is zero, leave the line blank. 1 Total household gross income From Line w on back. If over $20,000, do not claim this credit. 1 $.00 $.00 x.15= 2 $.00 3 $.00 4 $.00 5 $.00 2 Rent paid on this property in Property tax credit If under age 62 and not blind or disabled, use Table A, pages If 62 or older, or blind, or disabled, use Table B, pages Rent supplements received in 2005 by you or your landlord on your behalf 5 Allowable property tax credit Subtract Line 4 from Line 3. D-40 filers, enter here and on Line 30 of D Landlord s name Landlord s address (number and street) Apartment number City State Zip Code Landlord s telephone number Section B Credit claim based on real property tax paid 7 Total household gross income From Line w on back. If over $20,000, do not claim this credit. 8 DC real property tax paid by you on this property in Property tax credit If under age 62 and not blind or disabled, use Table A, pages If 62 or older, or blind, or disabled, use Table B, pages D-40 filers, enter the amount here and on Line 30 of D Enter information from your real property tax bill or assessment. If a section is blank on your tax bill, leave it blank here. Square number Suffix number Lot number Round cents to the nearest dollar. If amount is zero, leave the line blank. 7 $.00 8 $.00 9 $.00 Revised 08/ SCHEDULE H P1 Homeowner and Renter Property Tax Credit File order 5